TaxTMI 
TaxTMI 
1941 (4) TMI 16
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....as transferred to this Court for hearing and disposal. In view of the importance of the case to all persons interested in agriculture in this Province, this Special Bench has been constituted to hear the matter. In para 1 of the plaint, it is stated that the plaintiffs are zamindars holding a permanently settled estate. Then follow a number of paragraphs purporting to describe the position of zamindars before and after the Permanent Settlement Regulation (Regulation 1 of 1793). In para 6 it is said that the Permanent Settlement Regulation is an Act of Parliament, and in para 7 it is pleaded that as the Bihar Agricultural Income tax Act is repugnant to a Governor General's Act or a Parliamentary Statute and purports to alter the character of the permanent settlement the previous sanction of the Governor General was necessary to the introduction of the Bill in the Legislature and further that the Bill should have been reserved for signification of His Majesty's pleasure. In para 8 it is stated that the Bihar Agricultural Income tax Act directly infringes the rights granted by Regulation 1 of 1793 and as it repeals either directly or indirectly such regulation it is ultra vire....
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....terms of the Permanent Settlement Regulation and plead that the plaintiffs were rightly called upon under the provisions of the Bihar Agricultural Income tax Act to render a return of their income for the previous year for the purposes of assessment to agricultural income tax. The defendants deny that the plaintiffs are entitled to any relief whatsoever. Certain other pleas were taken in the written statement, but as those pleas were not pressed before us it is unnecessary to set them out in this judgment. In the Court of the Subordinate Judge the following issues were framed : "1. Is the suit as framed maintainable ? 2. Is the suit bad for any want of or defect in the notice under Section 80, Civil Procedure Code ? 3. Does the impugned Acts require the previous sanctions of the Governor and the Governor General under Sections 299(3) and 108(2), Government of India Act, 1935, or should they have been reserved for the signification of His Majesty's pleasure under the said Act ? Was the previous sanction and approval of the Governor obtained ? 4. Were the impugned Acts illegal, inoperative, repugnant and ultra vires ? 5. Can the impugn....
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....aintiffs by reason of the fact that it purports to tax a wider range of income than is permissible under the powers given to the Provincial Legislature by the Government of India Act, 1935, and further because it does not tax all agricultural income as defined in the Government of India Act, 1935. (2) The said Act purports to deal with rights and privileges relating to land revenue and repeals or modifies the terms of the permanent settlement and as the previous sanction of the Governor was not obtained to the introduction of the Bill as required by Section 299, Government of India Act, the Act was not validly enacted and is not binding on the plaintiffs. Further, the Bill was not validly enacted as it was not reserved for the consideration of the Governor General as required by the Instrument of Instructions issued to the Governor of the Province. (3) The said Act purports to repeal or modify the Permanent Settlement Regulations and in particular Regulation 1 of 1793 which is an Act of Parliament or a Governor General's Act. The said Act was not validly enacted by reason of the fact that the previous sanction of the Governor General was not obtained for the introduction of the....
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....y officers of the Crown as such ; (b) any income derived from such land by (i) agricultural, or (ii) the performance by a cultivator or receiver of rent in kind of any process ordinarily employed by a cultivator or receiver of rent in kind to render the produce raised or received by him fit to be taken to market, or (iii) the sale by a cultivator or receiver of rent in kind of the produce raised or received by him, in respect of which no process has been performed other than a process of the nature described in sub clause (ii) ; (c) any income derived from any building owned and occupied by the receiver of the rent or revenue of any such land, or occupied by the cultivator, or the receiver of rent in kind, of any land with respect to which, or the produce of which, any operation mentioned in sub clauses (ii) and (iii) of clause (b) is carried on : Provided that the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue or the cultivator or the receiver of the rent in kind by reason of his connexion with the land, requires as a dwelling house, or as a storehouse, or other out building. " Sect....
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....in the definition contained in the Bihar Agricultural Income tax Act cannot possibly make the latter Act ultra vires. In effect the Bihar Government are proposing to tax less than they are entitled to do. The greater must include the less, and if the Provincial Government are entitled to tax all agricultural income as defined in Section 2(1). Income tax Act, then they are clearly entitled to tax a part only of such income. It is impossible to hold that the omission to tax some forms of agricultural income could render the whole of the Bihar Act ultra vires and of no effect. In the Income tax Act definition the words used are : " Agricultural income ' means (a) any rent or revenue derived from land which is used for agricultural purposes. . . . . . . . ." In the Bihar Agricultural Income tax Act the words used are : " Agricultural income ' means any rent or income derived from land which is used for agricultural purposes. . . . . . . . ." It was argued that there was some difference in this part of the definition, though it was not stated with any clearness as to what that distinction was. In my view the word " revenue " in the Income tax Act is used to denote income or a....
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....finition given in the Income tax Act. Under the Income tax Act income from revenue free agricultural land can only be regarded as " agricultural income " if the land is subject to a local rate assessed and collected by officers of the Crown as such, whereas under the Bihar Act income from revenue free agricultural land would be agricultural income if it was derived from land subject to a local rate or cess assessed and collected under the provisions of certain Local Acts, no matter how such local rate or cess was assessed or collected or by whom. In other words, in the definition contained in the Income tax Act the local rate must be assessed and collected by officers of the Crown as such, whereas under the Bihar Act income from revenue free agricultural land would be agricultural income if it was derived from land subject to a local rate or cess assessed and collected under the provisions of certain Local Acts, no matter how such local rate or cess was assessed or collected or by whom. In other words, in the definition contained in the Income tax Act the local rate must be assessed and collected by officers of the Crown as such, whereas under the Bihar Act the local rate or cess m....
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....upon the Collector. Section 41 deals with payment of cess by holders of estates. Section 98 provides that every amount due or which may be due to the Collector under the provisions of the Act in respect of any arrears of cess may be realized by such Collector in the manner provided for the realisation of a public demand. Section 4 defines " Collector " and the term includes any person specially invested with the powers of a Collector for the purposes of this Act. By Section 100 the Board of Revenue may at anytime invest any person with the powers of a Collector under the Act such powers to be exercised by such person under the control or supervision of the Collector or independently of such control and supervision, as the Board of Revenue shall direct. Section 9 of the Act provides that the proceeds of the local cess in each district shall be paid into the district fund of the district and " district fund " is defined in Section 4 as meaning the fund formed under Section 52, Bengal Local Self Government Act of 1885. From these provisions it is clear that the rate of cess to be levied is fixed by the District Board and the proceeds are paid into a district fund. It is however cle....
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....to do is to invest a person with the powers of a Collector under the Act. Once such a person is invested with such powers, he is, as far as those duties are concerned, a Collector, and he performs his duties not as a servant or agent of the District Boards but as a Collector. In my view even such a person invested by the Board of Revenue must be regarded as a Collector and he performs his duties as a Collector, that is, as an officer of the Crown as such. That being so, it appears to me that cess in this Province is assessed and collected by officers of the Crown as such and that being so there is no real difference between the two definitions as far as the assessment and collection of cess is concerned. Cess however is not payable in respect of any estate within the limits of municipality : See the present proviso to Section 2, Cess Act. Such lands however are assessed to local rates : See Section 98 and the following sections of the Bihar and Orissa Municipal Act (Act VII of 1922). These rates are not collected by the Collector but are collected by officers or servants of the municipality : See Section 120 and the following sections of the Bihar and Orissa Municipal Act. It is....
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....can be said to be assessed and collected under a Bengal Act, but it cannot be said to be cess collected by an officer of the Crown as such. That being so, it is contended that agricultural income of such tenure holders and raiyats is taxable under the Bihar Agricultural Income tax Act though such income is not within the definition given in the Government of India Act, 1935, and the Income tax Act. The income of a raiyat does not fall naturally within Section 2(a)(1), Bihar Agricultural Income tax Act, but rather falls within Section 2(a)(2)(i) of that Act. His income is derived from land by agricultural and clearly falls within the definitions given in both Acts. A tenure holder of revenue free land not himself cultivating lands does derive income from land used for agricultural upon which cess is payable by the proprietor and that cess is assessed and collected by the Collector who is an officer of the Crown, and, as I have already held, it is assessed and collected by the Collector as such. Therefore income of tenure holders of revenue free land falls within the definition given in both the Bihar Agricultural Income tax Act and the Income tax Act and, therefore, the Bihar ....
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....plaintiffs was Attorney General for British Columbia v. Attorney General for Canada (1973) A.C. 377, in which it was also held that the offending portion of the Natural Products Marketing Act, 1934, as amended by the Natural Products Marketing Act, 1935, was so inextricably interwoven with the other portions of the Act that the whole Act must be held to be ultra vires. In my view, however, it is possible in the present case to hold that the Bihar Agricultural Income tax Act, in so far as it taxes agricultural income falling within the definition given in the Income tax Act, is intra vires and only ultra vires in so far as it taxes income which falls outside the definition of " agricultural income " given in that Act. It is, in my judgment, open to this Court so to limit the definition given in the Bihar Act as to bring it within the competence of the local Legislature. In Macleod v. Attorney General for New South Wales (1891) A.C. 455, their Lordships of the Privy Council construed a definition of " bigamy " given in Section 54, Criminal Law Amendment Act, 1883, so as to bring the Act within the competence of the New South Wales Legislature. Section 54, Criminal Law Amendment Ac....
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....s defined as meaning any liability in cash or kind, whether secured or unsecured, due from an agriculturist, whether payable under a decree or order of a civil or revenue Court or otherwise. The definition of the debt was wide enough to cover debts due on negotiable instruments, and Sulaiman, J., was of opinion that in so far as it dealt with such debts the Act was ultra vires but only to that extent. Varadachariar, J., though he held that the point did not strictly arise, observed at page 196 (of 3 F. L. J.) : " The argument of total invalidity need not be dealt with at any length, not only because it was not seriously pressed, but also because there is little force in it. If an enactment deals in part with matters beyond the competence of the Legislature which enacted it, it must be held to be wholly invalid only in cases where the valid and invalid provisions are inseparably intermixed or the innocent provisions are merely ancillary to the offending provisions. This cannot be said to be the position in the present case. Further as there is no provision in the Act dealing in terms with negotiable instruments, any objection based on the wide scope of the Act may be obviat....
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.... of " agricultural income " in the Income tax Act. The next contention urged by the plaintiffs was that the Bihar Agricultural Income tax Act, 1938, was ultra vires in so far as it purported to tax income of zamindars holding permanently settled estates and in the alternative it was argued that if the Act is not ultra vires it should be held that on its true construction it did not tax income of zamindars holding permanently settled estates but only the income of zamindars holding estates temporarily settled. Shortly stated, the argument was that the rights and privileges of permanently settled zamindars are governed by the Permanent Settlement Regulation (Regulation 1 of 1793) which is an Act of Parliament or a Governor General's Act. By Section 108(2) no Provincial Legislature can enact legislation which repeals, amends or is repugnant to any provision of an Act of Parliament or any Governor General's Act without the previous sanction of the Governor General. As the previous sanction of the Governor General was not given in this case, the Provincial Legislature had no power to legislate in a manner affecting the rights and privileges of permanently settled zamindars. I....
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....d documents as Field's 'Regulations of the Bengal Code', Phillip's 'Land Tenures of Lower Bengal' and Shore's Minutes. Their Lordships were also referred to certain reported decisions of the Courts. Their Lordships, however, are of opinion that there is here no occasion for any pronouncement by them upon the question of the exact nature of the rights and interests in relation to the land which existed in the governing authority before 1793, but that this appeal falls to be determined upon a consideration of the language of the Regulations and of the Indian Income tax Act, 1922." It will appear later that their Lordships of the Privy Council were called upon in Probhat Chandra Barua v. Emperor [1930] 58 Cal. 430 to consider much the same argument as that addressed to us in this case, and in my judgment it is unnecessary in this case to come to any definite conclusions as to the respective rights of the governing authority and the zamindars in the land before the Permanent Settlement Regulations, and this case as Probhat Chandra Barua v. Emperor [1930] 58 Cal. 430 falls to be decided upon a consideration of the Regulations themselves. The state of affai....
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.... perfect knowledge of the same and of all circumstances relating thereto, as the said Court of Directors shall think best adopted for that purpose; and thereupon, according to the circumstances of the respective cases of the said Rajas, zamindars, etc., to give orders and instructions to the several Governments and Presidencies in India, for effectually redressing, in such manner as shall be consistent with justice and the laws and customs of the country, all injuries and wrongs which the Rajas, zamindars, polygars, talukdars and other native land holders, may have sustained unjustly in the manner aforesaid, and for the settling and establishing upon principles of moderation and justice, according to the laws and constitution of India, the permanent rules by which their respective tributes, rents and services shall be in future rendered and paid to the said united Company'." Thereafter enquires and investigations followed and in 1790 91 a complete Code of Regulations for the conclusion of a new settlement of the land revenue for Bengal, Bihar and Orissa was promulgated by Lord Cornwallis. Decennial settlement of 1790 91 was made permanent by Regulation 1 of 1793. The settlem....
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....thy and numerous. In the course of the arguments before the Board attempts were made to support the respective arguments by a phrase picked from one regulation or a passage chosen from another, even though the particular regulation only purported to deal with some matter incidental to the permanent settlement. In the opinion of their Lordships, this part of the case falls to be determined primarily upon a consideration of the language of Regulation 1 of 1793. While bearing in mind the passages in other regulations to which their attention was drawn, their Lordships feel that the above mentioned regulation is the master regulation for the immediate purpose before the Board, and that its provisions constitute the overriding feature in the present case". In that case their Lordships were called upon to consider what was the precise assurance or undertaking given to the zamindars by the permanent settlement, and in the view of their Lordships such would have to be gathered from Regulation 1 of 1793. In my judgment the observations of Lord Russell apply with equal force to the present case, and this case also falls to be decided primarily upon a consideration of the language of Regul....
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.... estates at such assessment for ever. (5) Article 4. The lands of some zamindars, independent talukdars and other actual proprietors of land having been held khas or let in farm, in consequence of their refusing to pay the assessment required of them under the regulations above mentioned, the Governor General in Council now notifies to the zamindars, independent talukdars and other actual proprietors of land whose lands are held khas, that they shall be restored to the management of their lands upon their agreeing to the payment of the assessment which has been or may be required of them, in conformity to the regulations above mentioned, and that no alteration shall afterwards be made in that assessment, but that they, and their heirs and lawful successors, shall be permitted to hold their respective estates at such assessment for ever; and he declares to the zamindars, independent talukdars and other actual proprietors of land, whose lands have been let in farm, that they shall not regain possession of their lands before the expiration of the period for which they have been farmed (unless the farmers shall voluntarily consent to make over to them the remaining term of the....
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....in the cultivation of their lands under the certainty that they will enjoy exclusively the fruits of their own good management and industry, and that no demand will ever be made upon them, or their heirs or successors, by the present or any future Government, for an augmentation of the public assessment in consequence of the improvement of their respective estates." It was contended that this regulation contains a promise, undertaking or assurance that the public demand would never be increased. According to the plaintiffs, this public demand was in the nature of a tax, and as the agricultural income tax is a tax on such profits, the passing of the Bihar Agricultural Income tax Act is a breach of the assurance or undertaking given by Lord Cornwallis and is an attempt to repeal or modify the provisions of the Permanent Settlement Regulation. It is true that the amount of the jama fixed at the time of the permanent settlement was fixed after a consideration of the profits or income then derived from the land, but in my view Regulation 1 of 1793 contains no assurance or undertaking to the zamindar that he would for ever thereafter be immune from taxation such as that imposed by the....
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....t any claim to an increase of the jama, based on an increase of the zamindari income, they contained no promise that zamindar should in respect of the income which he derived from the zamindari be exempted from liability to any future general scheme of property taxation, or that the income of a zamindari should not be subjected with other incomes to any future general taxation of incomes. Accordingly, they held that under the income tax Act, 1922, the zamindar of a permanently settled estate was assessable to tax under the Act in respect of income, profits and gains derived from his zamindari, subject to the exemptions in Section 4, sub section (3), of the Act (agricultural income), and the assessment should be computed after making proper allowance under Section 12, sub section (2), in respect of the jama assessed and paid. In this case their Lordships had to consider the effect of the Permanent Settlement Regulation (Regulation 1 of 1793) which they pointed out was the master regulation and which contained the provisions most favourable to the assessee, the zamindar. At page 446, Lord Russell, who delivered the opinion of the Board, observed: "Their Lordships, after care....
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....ent settlement was concluded or not'." It is to be observed that a very similar view as to the true meaning of Regulation 1 of 1793 had been expressed in earlier cases. In Freeman v. Fairlie [1837] 1 M.I.A. 305, the Lord Chancellor at page 342 observes: "I think it is to be collected from those Regulations that the proprietors of land in India had an absolute ownership and dominion of the soil; that the soil was not vested generally in the Sovereign; that the proprietors did not hold at the will of the Sovereign; but held the property as their own with the power of disposing of it absolutely; and if not disposed of, that it descended to their families. It is liable, indeed, to a tribute to the Government but it appears that the tribute was not fixed but was increased at the arbitrary will of the Government; and it appears further that if the tribute was not paid Government had the power of taking possession of the lands for the purpose of obtaining payment. Still notwithstanding these circumstances and these charges I think it impossible to read those Regulations which were prepared obviously with great caution and consideration by persons well acquainted with the s....
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.... classes of zamindari income and hold that a tax on zamindari income is no breach of any undertaking or assurance contained in the Permanent Settlement Regulation. But for the express exemption of agricultural income contained in Section 4(2). Income tax Act, the case would have applied with equal force to agricultural income. Counsel for the plaintiffs was compelled to concede that if the exemption of agricultural income from taxation in the Income tax Act was removed Probhat Chandra Barua's case [1930] 58 Cal. 430 would apply, and we would be bound to hold that agricultural as well as non agricultural income would be taxable. It was contended, however, that different principle applies when an Act was passed which purported to tax agricultural income only. It was argued that as the Bihar Act taxes agricultural income only, it imposes not a tax on income but a tax on land in the nature of a public demand as that expression is used in the Permanent Settlement Regulations. It was said that income tax is a tax on income generally without reference to its source and that a tax on income with specific reference to its source is not in reality a tax on income from that source but rat....
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....e tax Act imposes a tax on the assessees in their capacity as zamindars and not as members of the public. The tax, it is said, is a tax on a particular class of persons and is in short a zamindar's tax. As it is specifically directed at the zamindars the principles of Barua's case [1930] 58 Cal. 430 cannot apply, and the tax must be regarded as a breach of the assurance contained in the Permanent Settlement Regulations. It is clear however that the tax imposed by the Bihar Agricultural Income tax Act is not a tax on zamindars only. It imposes a tax on income derived from lands used for agriculture and from agriculture. Tenure holders and raiyats are liable to taxation just as much as zamindars, and zamindars of non permanently settled areas are in the same position as zamindars holding permanently settled estate. The Act applies generally to persons deriving income from agriculture and lands used for agriculture. It does not create a special tax upon the income of permanently settled zamindars. Further this Act merely abolishes the exemption in favour of agricultural income contained in the Income tax Act, 1922 What was specifically exempted from taxation is now made lia....
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....repeal or be repugnant to any provision of law in British India or any Bill which would alter the character of the permanent settlement. It is conceded that the Governor of this Province did not reserve this Bill for the consideration of Governor General; but even assuming that the Bill does alter the character of the permanent settlement, such failure to reserve the Bill for consideration would not make the present Act invalid. The Instrument of Instructions to Governor was issued under the provisions of Section 53, Government of India Act, and sub section (2) of that section provides that "the validity of anything done by the Governor of a Province shall not be called in question on the ground that it was done otherwise than in accordance with any Instrument of Instructions issued to him." There is no provision in the Government of India Act itself requiring such a Bill to be reserved for the consideration of the Governor General, and that being so the Act cannot be held to be invalid by reason of the Governor's failure to reserve the Bill as directed by para 18 of the Instrument of Instructions. On the other hand, however, if the Bihar Agricultural Income tax Act....
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.... this question because I am unable to hold that Regulation 1 of 1793 is an Act of Parliament. "Act of Parliament" is not defined in the Government of India Act, and Regulation 1 of 1793 cannot be said to have been enacted in the usual manner in which an Act of Parliament is passed. In the ordinary meaning of the expression, an "Act of Parliament" is an Act which has been passed by the House of Commons, the House of Lords and assented to by the King. Regulation 1 of 1793 was an enactment of the Governor General in Council in India and was never before Parliament in England. It is clear, however, that this Regulation together with the other Permanent Settlement Regulations were enacted pursuant to the provisions and directions contained in Section 39. Pitt's India Act of 1784 (24 Geo. III, C. XXV). That section, which I have earlier in this judgment quoted at length, required the authorities in India to give orders "for settling and establishing upon principles of moderation and justice, according to the laws and constitution of India, the permanent rules by which their respective tributes, rents and services of the rajas, zamindars, polygars, talukdars and other native ....
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....ement Regulations, and such appears to be the view of many authors of works on the Indian Constitution. It must be remembered however, that at this time the East India Company were de facto sovereign if not de jure. It has been said that the Company exercised sovereign powers in trust for the Crown. Be that as it may, they were in fact the sovereign of the territories affected by the permanent settlement and as such undoubtedly claimed the right to legislate for such territory and its inhabitants. It appears to me that the Marquis Cornwallis must have enacted these regulations by virtue of the powers of legislate given to or assumed by the Governor General in Council, and that being so, it cannot be said that the Permanent Settlement Regulation (1 of 1793) is in any sense an Act of Parliament. The plaintiffs, however, contended that the Governor General in Council has no such power to legislate as to enable him to enact Regulation 1 of 1793, consequently that regulation must be regarded as an executive order or as a kind of regulation or by law made in pursuance of powers given by an Act of Parliament. If such was the case, it is urged that the regulation forms part of the Act o....
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....hat is, to Acts enacted by the Governor General after the Government of India Act came into force. The Permanent Settlement Regulation was in no sense an Act of the Governor General but was an Act of the then Governor General in Council. That being so, Section 108(2)(b), Government of India Act, can in no way render the legislation invalid. Lastly, it was contended that assuming that the provisions of the Bihar Agricultural Income tax Act are repugnant to Regulation 1 of 1793 and assuming further that the Bihar Act was validly enacted the latter Act on its true construction should not be held to repeal or affect in any way the provision of Regulation 1 of 1793. It was argued that the Bihar Agricultural Income tax Act is a general Act, whereas Regulation 1 of 1793 is a special Act dealing with permanently settled estates. On a true construction of the Bihar Act, it was contended that this Court should hold that it applied to non permanently settled estates only and not to permanently settled estates. In the view I have taken of the effect of Regulation 1 of 1793 the question as to the true construction of the Bihar Act does not really arise, but I refer to the question shortly in....
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....dealt with by earlier legislation, you are not to hold that earlier and special legislation indirectly repealed, altered, or derogated from merely by force of such general words, without any indication of particular intention to do so." Counsel for the plaintiffs also relied on Associated Newspapers Ltd. v. Corporation of London (No. 2) [1961] 2 A.C. 429. In that case the occupiers of certain hereditaments situate in the City of London and forming part of the area reclaimed from the river Thames, were rated to so much of the general rate levied under the City of London (Union of Parishes) Act, 1907, as represented the consolidated rate and the police rate, which was imposed by the City of London Police Act, 1939. The land had been reclaimed under the provisions of 7 Geo. III, C. XXXVII and under Section 51 of that Act owners of such reclaimed lands were to be "free from all taxes and assessments whatsoever." The city of London Sewers Act, 1848, which provided for the levying of the sewer rate and the consolidated rate, enacted by Section 169 that every such rate shall be made upon every occupier of any house or building in the city "whether such person shall be now liab....
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....cultural income is made taxable without distinction, and that being so, any protection afforded to agricultural income by any earlier Act is repealed by the present Act. The view which I have expressed is in accordance with the view expressed by Rankin, J., in Emperor v. Probhat Chandra Barua [1924] 51 Cal. 504, and by the majority of the Full Bench of the Calcutta High Court in Emperor v. Probhat Chandra Barua [1927] 54 Cal. 863. As I have stated however the point does not really arise in this case. For the reasons which I have given, I am satisfied that the plaintiffs are not entitled to the relief claimed, and would dismiss their suit with costs. The questions as to whether the Bihar Agricultural Income tax Act is ultra vires the powers of the Provincial Legislature or is ultra vires in so far as it purports to tax agricultural income of permanently settled zamindars involved substantial points of construction of the Government of India Act, 1935, and I would, therefore, grant a certificate to the plaintiffs under Section 205(1) of that Act. FAZL ALI, J. The plaintiffs who are the proprietors of a permanently settled estate in the district of Patna have brought this suit a....
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....chedule (hereinafter called the "Provincial Legislative List.")" As agricultural income is item 41 of the Provincial List otherwise called List II the Provincial Legislature of Bihar purporting to act under this section enacted what is known as the Bihar Agricultural Income tax Act in 1938 and some time later it passed another small Act slightly amending the provisions of the former Act. The Bihar Act VII of 1938 which is the main Act, received the assent of the Governor of Bihar on 20th August 1938 and was published in the Bihar Gazette of 12th October 1938. Section 2 of the Act defines agricultural income and Section 3 provides that the agricultural income tax at the rate or rates specified in the schedule to the Act shall be charged for each financial year in accordance with and subject to the provisions of the Act on the total agricultural income of the previous year, of every person. Sections 5 to 15 which are the remaining sections in Chapter 2 contain provisions as to the limits of taxable income and other cognate subjects such as what class of owners of agricultural property are to be exempted and how the tax on other class of persons is to be assessed. Chapter 3 enumera....
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....defined as follows: "Agricultural income means agricultural income as defined for the purposes of the enactments relating to Indian income tax." Section 141(1) provides that no Bill or amendment varying the meaning of the expression "agricultural income" as defined above shall be introduced or moved in either Chamber of the Federal Legislature except with the previous sanction of the Governor General in his discretion. Now in order to appreciate the argument which was advanced before us it will be useful to set out the definition of "agricultural income" as given in the Income tax Act side by side with the definition of that expression as given in the Bihar Agricultural Income tax Act: Section 2(1), Income tax Act: Section 2(a), Bihar "Agricultural income" means: (a) Agricultural Income tax any rent or revenue derived from land Act: which is used for agricultural purposes, and is either assessed to land "Agricultural income" revenue in British India or subject to means: (1) any rent or a local rate assessed and collected by income derived from land officers of the Crown as such; (b) any which is used for agriculincome derived from such land by: (i) tural purposes, and is either ....
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....act by itself will not make the Act ultra vires. If it is assumed that the Bihar Legislature, having regard to the terms of the Government of India Act, is competent to levy tax on income derived from land as well as buildings of certain description it is clearly competent to tax income from land only for the present it being open to it to tax the income from buildings referred to in clause (c), Income tax Act if and when it chooses to do so in future. The Legislature has therefore in no way exceeded its power and I am not prepared to hold that it has contravened the provisions of the Government of India Act by merely adopting a definition which is narrower than the definition given in that Act. The second contention however is a more serious one, because the substance of that contention is that clause (i), Bihar Act, is wider than clause (a), Income tax Act, and so the definition enables the Bihar Legislature to tax income which it has not been empowered to tax under the Government of India Act. For the purpose therefore of determining whether this contention is correct, we have to compare carefully the two corresponding provisions. The first difference which has been pointed o....
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....g to this subject. Mr. P.R. Das, who appears on behalf of the plaintiffs, relies upon Sections 9 and 38 of the Act in support of his contention that "cess" is not assessed by officers of the Crown but by the District Board. Section 9 provides that the proceeds of local cess in each district shall be paid into the local funds of the district and Section 38 provides that the cess shall be assessed and levied at such rate as may be determined for such year by the District Board. This last provision seems at the first sight to support the contention of Mr. Das, but when the other provisions of the Act are taken into consideration it becomes manifest that the authority which assesses the cess is not the District Board but the Collector. The District Board has merely an advisory function and its knowledge of the local conditions is utilised for the purpose of determining the rate, but after the rate is so determined, the Collector publishes the rate in the Gazette and otherwise specifies from which date it will take effect. The Collector then fixes the amount of the cess payable by each person or estate upon the valuation of the lands. This shows that the final act of assessment rests wi....
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....he cess payable under the Cess Act must be held to be assessed as well as collected by officer of the Crown. The Corporation of Trinity House was, as pointed out in the case relied on by Mr. Das, nothing more than an amalgamation by the authority of the State of a vast number of bodies having general authority over the light houses and beacons throughout the country for the general convenience. Thus, in view of its nature and origin the Corporation of Trinity House could not be regarded as an emanation from the Crown. Similarly, the Meat Industry Board could not be regarded as a representative of the Crown, because the powers conferred upon it were to be exercised at its own discretion and without consulting the direct representatives of the Crown, and also because the charges it levied went to its own fund. The position in this case however is not the same. I think that inasmuch as in India both the Government at the Centre and in the Province, is carried on in the name of the Crown, the expression "officers of the Crown" occurring in an India Statue may be taken to be synonymous with the expression "officers of the Government." The Collector of the District undoubtedly exercis....
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....say that the framers of the Bihar Act had not power to introduce even verbal changes in the definition of agricultural income as adopted in the Government of India Act. All that they were required to guard against was that there was no change in the meaning or scope of the expression "agricultural income" and the definition in the Bihar Act was not wider than that to be found in the Income tax Act, If however the definition is found to be wider, it does not, in my judgment, necessarily follow that the whole Act thereby becomes ultra vires. We have on this point for our guidance a number of authoritative pronouncements which have laid down that if a part of an Act can be held to be valid and another part invalid, then if the offending provisions are so interwoven into the other scheme of the Act they are not severable from the other provision, the whole Act is ultra vires, but if the two parts are severable then the Act will be partly valid and party invalid, it being invalid only in regard to the offending provisions. This view has been clearly set out in the judgment of Sulaiman, J., in Subrahmanyan Chettiar v. Muthuswamy Goundan [1940] 22 P.L.T. 155; 3 F.L.J. 157, at pp. 179 and ....
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.... that the sections now said to be severable are incidental and ancillary to the main legislation. Their Lordships are of opinion that this is true, and that as the main legislation is invalid as being in pith and substance an encroachment upon the Provincial rights the sections referred to most fail with it as being in part nearly ancillary to it." In the second case another Act was held to be ultra vires of the Dominion Parliament of Canada on similar grounds, it being held that in pith and substance the Act was an encroachment upon the Provincial field and that part of the Act which did not encroach were so inextricably mixed up with the offending provisions, that it was impossible to sever them. In my opinion neither of these cases can be of help to the plaintiffs. Agricultural income being one of the subjects mentioned in List II otherwise called the Provincial List of the Government of India Act, it cannot be said that in pith and substance this Act is an encroachment upon the rights of the Central Government. It is true that the definition has been some what carelessly drafted, but all that can be said is that if there is any estate the income of which cannot be regarded a....
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....er, is not material, because the plaintiffs are neither tenure holders nor raiyats but are admittedly the proprietors of a revenue paying estate. The second point urged on behalf of the plaintiffs was that the Agricultural Income tax Act, in so far as it affects the permanently settled estates, is ultra vires of the Bihar Legislature, because that Legislature had no power to pass an Act inconsistent with the Permanent Settlement Regulation without following the procedure laid down by the Government of India Act. In urging this point Mr. P.R. Das, counsel for the plaintiffs, read out to us extracts from certain despatches which bad passed between Lord Cornwallis and the directors of the East India Company and from the minutes recorded by Sir John Shore before the enactment of Regulation 1 of 1793 in order to show firstly that the permanent settlement was made on the footing that the landlords were the proprietors of the soil and secondly, that the jama or the revenue which was fixed at the time of the permanent settlement was a land tax. Learned counsel also read to us all the relevant sections of the permanent settlement regulation and certain other regulations to support his co....
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.... Act in any way affects the Permanent Settlement Regulation or, as Mr. Das puts it, whether the imposition of the tax under the Act amounts to an augmentation of the jama. In my opinion this is the most important question in the case, because if it is answered in the negative no further question arises. I am also of the opinion that it has to be answered in the negative, because it is also answered by the Privy Council in Probhat Chandra Barua v. Emperor [1930] 58 Cal. 430, which must be regarded as the last word on the subject and which I accordingly propose to discuss at some length. It appears that prior to 1926 conflicting views had been expressed by the Calcutta High Court as to whether income derived from permanently settled estates was liable to income tax notwithstanding the Permanent Settlement Regulation: See Emperor v. Probhat Chandra Barua [1924] 51 Cal. 504 and Emperor v. Indu Bhusan Sarkar [1926] 53 Cal. 524. In May 1926 Barua's case came up before a Bench consisting of Sanderson, C.J., and Rankin, J., who referred the following question among others for decision to a Full Bench: "Whether having regard to the terms of the Permanent Settlement Regulation, ....
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.... of your estate. All this shall cease. You shall have fixity of payment and fixity of tenure. If you improve the revenue of your zamindari you shall enjoy the fruits of your improvements without fear of the Government claiming that, because the revenue produced by the estate has increased, the payment you make to Government as a condition of holding that estate shall be increased also." His Lordship then summarised his conclusions thus: "In their Lordships' opinion, while the regulations contain assurances against any claim to an increase of the jama, based on an increase of the zamindari income, they contain no promise that a zamindar shall in respect of the income which he derives from his zamindari be exempt from liability to any future general scheme of property taxation, or that the income of a zamindari shall not be subjected with other incomes to any future general taxation of incomes." His Lordship also quoted with approval the following passage from the judgment of Ghose, J., in the Full Bench case: "There was no promise or engagement of any description whatsoever by which the Government of the day surrendered their right to levy a general tax u....
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....nded to draw any distinction between them. Their Lordships however did recognize the distinction between agricultural income and other income derived from zamindari, because as was pointed by them, though in Section 4(3). Income tax Act, 1922, which enumerates the incomes to which the Act shall not apply, agricultural income is included, the wider expression "income derived from a zamindari" is not included in the Section. The decision of the Privy Council, in my opinion is fully applicable to this case, because the chief point to be decided in Barua's case was the same as in this case and the argument for the assessee as reproduced in certain reports and as summarized in the judgment of the Privy Council was more or less the same as the argument advanced in the present case. Mr. P.R. Das tried to distinguish the Privy Council case by following a different line of argument. He conceded that notwithstanding the Permanent Settlement Regulation, the state may impose a tax on income, but he strenuously contended that the tax which is imposed under the Agricultural Income tax Act is not a tax on income but is a land tax, or in other words, a tax of the same description as the ....
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.... only in deference to Mr. Das and because he has asked us to record our opinion about it. In my judgment all that Lord Macnaghten wished to emphasize was that though income may be derived from different sources, the income tax was one tax and not a collection of taxes in the sense that in every case you have to tax income only and nothing else which does not answer the description of income. He never meant to suggest that an Act which purports to tax income should not refer to the sources of income or as soon as there is a reference to the source the tax would cease to be an income tax. In the Income tax Act, no less than five definite sources of income are set out and agricultural income tax is defined and excepted. It will be fantastic to suggest that the tax levied under the Act is not an income tax, because the sources of the income are indicated. As the Provincial Legislature has now been empowered to tax agricultural income, income may for the purpose of taxation be divided under two broad heads, (1) agricultural income and (2) non agricultural income. Non agriculture income is taxed by the Central Government, whereas the agricultural may be taxed by the Provincial Gove....
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....Royan in their answer to the questions put to them: See Harrington's Analysis, Vol. III. p. 328. The answer of the former to the twentyninth question which asked why the King purchased lands since he was the lord of the country was 'The Emperor is proprietor of the revenue issuing out of the territory under his authority; but he is not the proprietor of the soil.' On the other hand, Mr. Grant maintained that it was the fundamental principle in all the native estates of Asia 'that the Sovereign is sole universal proprietory lord of the land; and the ryots, who are husbandmen or peasantry, hold directly of the prince, by immemorial usage, as perpetual tenants in capite; subject to the annual payment of a certain fixed portion of the gross produce of the soil in money or kind......' (Ibid, p. 360). Colonel Wilks thought that the fact which settled the controversy was that the share of the produce which went to the proprietor was an infinitesimal one as compared with the share which went to the King and he expressed himself thus: 'It is absurd to distinguish as proprietor the person entitled to one tenth' (Colonel Wilks subsequently attempted to show that th....
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....of Lord Parker in Ranjit Singh v. Kali Dassi Debi [1917] 44 Cat. 841. "Passing to the settlement of 1793 it appears to their Lordships to be beyond controversy that whatever doubts be entertainer as to whether before the English occupation the zamindars had any proprietary interest in the lands comprised within their respective districts, the settlement itself recognizes and proceeds on the footing that they are the actual proprietors of the land for which they undertook to pay the Government revenue. The settlement is expressly made with zamindars, independent taluqdars and other actual proprietors of the soil': See Regulation I, Section 3, and Regulation 8, Section 4. It is clear that since the settlement the zamindars have at least a prima facie title to all lands for which they pay revenue such lands being commonly referred to as malguzari lands". The above passage states very clearly the effect of the Permanent Settlement Regulation of 1793. But in the famous case in Thakooranee Dossee v. Bisheshur Mookerjee [1865] 3 W.R. Act X.R. 29, which was heard by fifteen Judges of the Calcutta High Court Trevor, J., expressed the opinion that though Regulation 1 of 1793 ....
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....riters on the subject one of whom Colonel Wilks called it "a duty, tax or quit rent." It must also be conceded that the word "tax" would not be an inappropriate description of jama, if it is assumed that the zamidar was a proprietor of the soil. If he was a proprietor of the soil, he was entitled to retain the entire produce of the soil and if the Government took from him any part of the produce that was prima facie in the nature of a tax. At the same time, if one were to examine the matter historically, ore might feel inclined to doubt whether "tax" is an appropriate expression. The Moghul authorities quoted in Harrington's analysis called it a tribute or rent and in Freeman v. Fairlie [1837] 1 M.I.A. 305, the Lord Chancellor is reported to haw said: "Zamindars and talukdars were owners of the soil, subject only to a tribute such as I have stated to Government; and it was the object of those Regulations of the year 1793, to make that tribute which had been considered as dependent in its amount on the will of the governing power, fixed and permanent". Again in Field's Regulation of the Bengal Code we find that zamindari tenure is described as follows: "....
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....egulation 1 of 1793 was an Act of Parliament. This regulation was never considered by the two Houses of Parliament nor did it receive the assent of His Majesty the King. It was enacted in India by the Governor General, there being nothing in its preamble or anywhere else to show that it was enacted under any authority delegated to the Governor General by the British Parliament. Mr. Das contends that it became an Act of Parliament, because it was enacted in obedience to Pitt's India Act of 1784, but, in my opinion, there is no warrant for such a conclusion. The Act of 1784 after reciting certain complaints made on behalf of a number of Rajas, zamindars etc., states that such complaints should be investigated and if founded in truth, should be redressed. It directed the Court of Directors of the East India Company, "to adopt, take and pursue such methods for enquiring into the causes, foundation and truth of the said complaints, and for obtaining a full and perfect knowledge of the same and of all circumstances relating thereto, as the said Court of Directors shall think best adapted for that purpose; and thereupon, according to the circumstances of the respective cases ....
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....tion 4, London Hackney Carriages Act, 1850, the then Commissioners of Police were authorized to make regulations in regard to the boundaries of standings for hackney carriages and the number of carriages to be allotted on a standing and certain other matters. They did make certain regulations in pursuance of the authority conferred upon them by the Act and one of these regulations being broken, it was held that the breach of regulations made under the authority of the statute was a breach of the statute itself. In the second case it was held that certain duties levied by an Order in Council issued under Section 133, Customs Regulation Act of 1879, must be deemed to have been really levied under the authority of the Act under which the order was issued, because the Legislature had not parted with its perfect control over the Governor and had the power at any moment of withdrawing or altering the power which they had entrusted to him. These decisions are not applicable, because the Permanent Settlement Regulation did not consist of mere bye laws or rules made under an Act of Parliament, but was an independent measure enacted in India by a de facto governing authority. It was conte....
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.... case in the following manner. According to Mr. Das, Regulation 1 of 1793 which was an earlier and special legislation contained a promise that there shall be no further tax on the income of estate of which the jama had been fixed (permanently settled estates). Then followed a subsequent general Act which purports to tax agricultural income. As this Act does not use specific words to show that the Permanent Settlement Regulation was intended to be repealed, the two statutes must be read together as if they were quite consistent with each other and the object of the Bihar Act must be taken to tax only such agricultural income as could be taxed consistently with the promise made in the Regulation of 1793. In other words, according to Mr. Das the Bihar Act, when properly construed, cannot be held to apply to agricultural income derived from permanently settled estates, though it may be applicable to similar income from tenures, raiyati lands and the estates which are not permanently settled as for example temporarily settled estates within the Government khas mahal. Now this question can arise for consideration only, if it is held that the tax levied under the Bihar Act is a tax of....
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....s unqualified as the exemption given in regard to agricultural income under the Income tax Act. Why should not then the Bihar Agricultural Income tax Act be taken to be a repeal of the earlier enactment, because the language which is used in this Act is universal and comprehensive. The Act purports to tax "the total agricultural income of every person" (Section 2) and Section 4 recites in express terms the Act shall apply to all agricultural income derived from land situated in the Province of Bihar. There is nothing in the Act to suggest that it was intended to apply to lands other than those comprised within the permanently settled estates, or to exclude the liability of so large a class of tax payers as are holders of permanently settled estates in Bihar. If these persons were intended to be excluded the Legislature would have used apt words to express its meaning. I think that I might usefully quote here the following observations of Hamilton, J., which were quoted by Rankin, J., in Emperor v. Probhat Chandra Barua [1924] 51 Cal. 504 at p. 520. "Can Section 33......in view of that history and of its subject matter, be so read as to make it subject to an unexpressed exc....
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....rts to repeal the Permanent Settlement Regulation. (3) That the Permanent Settlement Regulation is not an Act of Parliament and can be repealed by the Legislature of the Province or Provinces affected by it, provided that the procedure set out in the Government of India Act is followed. In the present case the Act cannot be questioned as the Governor has given his assent to it after it was passed. (4) That the Agricultural Income tax Act purports to tax all lands and estates permanently settled or otherwise and it will not be correct to hold that by this Act the income from permanently settled estates cannot be taxed. In my opinion the suit must fail and should be dismissed with costs. MANOHAR LALL, J. The plaintiffs, who are zamindars holding permanently settled estates in the district of Patna in Bihar, have instituted this suit on 7th October 1939 for a declaration that the Provincial Legislature of Bihar has no jurisdiction to enact the Bihar Agricultural Income tax Act (Act VII of 1938) as amended by the Bihar Agricultural Amendment Act (Act V of 1939) (hereinafter to be referred to as the Act) imposing agricultural income tax on their estate which was settled under the Per....
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....alidity of the Act upon three grounds, firstly, that the Act has not been validly enacted under the provisions of the Government of India Act, 1937 (hereinafter to be referred to as the India Act), secondly, that if it is held to be validly enacted it cannot apply upon its true construction to a permanently settled estate and lastly, that if the Act can be construed to operate as a repeal of the legislative provisions of the regulation, this involves a direct breach of the promise given under the regulation. It will be convenient in the first instance to examine the scope of the Act in order to find out the nature of the imposition so that it may be decided to what extent the imposition is inconsistent with the provisions of the regulation. The Act which received the assent of the Governor on 12th October 1938, states in the Preamble that this is "an Act to provide for the imposition of a tax on agricultural income" and contains the Preamble that "whereas it is expedient to impose a tax on agricultural income arising from lands situated in the Province of Bihar; It is hereby enacted as follows". Agricultural income is defined by Section 2(a). The rest of the Act is divided into ....
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....s which will be indicated hereafter. His Lordship after examining all the relevant provisions in the various Bengal Regulations of 1793 came to the conclusion that the regulation was a master regulation and then proceeded to examine its terms and specially Art. 6 which was relied by counsel before their Lordships (as it has been mainly relied upon by counsel for the plaintiffs before this Court) and held that their Lordships "are unable to find in the regulation any statement or assurance that a zamindar will never be liable to taxation in respect of the income derived from his zamindari or (to put the matter from another point of view) that a zamindar will, as to so much of his property as consists of income derived from his zamindari be exempt from schemes of taxation applicable generally to the incomes of the inhabitants of British India". His Lordship then gives a most valuable parapharase of Art. 6, which may be usefully quoted here: "You have in the past been liable to have the amount of the jama increased according as the actual produce of the estate increased; to enable the Government to obtain this you have been subjected to frequent investigations to ascertain....
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....ature by giving it that power by inserting it as item 41, in List II, Schedule 7. The argument that income tax is a tax on income without any reference to a source loses sight of the Sections in the Income tax Act which specifically mention the sources, e.g.. Section 4, Section 6 and Section 12. It is proper that I should state here the other grounds upon which the decision in Barua's case was sought to be distinguished. It was argued by Sir Sultan Ahmad, who gave a forcible reply on behalf of the plaintiff that that case only decided the taxability of the non agricultural income arising from the estate of the assessee and that therefore the observations of Lord Russel should be taken to mean only that there was no promise that non agricultural income will not be assessed by any future general scheme of property taxation but that either it must be held that the promise under the Regulation was to exempt agricultural income from further taxation or that the point was never decided and remains open to argument. I am unable to accept this contention as sound. At the top of p. 7 (of 5 I.T.C.) the argument of the appellant before the Privy Council has been stated to be in these w....
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.... and it was pointed out that it must be so deducted (these two cases did not concern permanently settled estates). It is also true that "Whatever doubts be entertained as to whether before the British occupation the zamindars had any proprietary interest in the lands comprised within their respective districts, it is now established by high authorities that the permanent settlement itself recognises and proceeds on the footing that they are the actual proprietors of the land for which they undertake to pay the Government revenue: Per Sir George Lowndes in Gobinda Narayan v. Shamlal Singh [1931] 58 I.A. 125, al p. 132 approving the well known passage from the judgment of Lord Parker in Ranjit Singh v. Kali Dassi Debi [1917] 44 I.A. 117, at p. 122". But the assessee, the plaintiff, ignores the position of zamindars which is expressly provided by Arts. 3, 4 and 5 of the Regulation, that is to say the zamindars are "allowed to hold their estates at such assessment for ever." In Haradas Acharjya v. Secretary of State [1917] A.I.R. 1917 P.C. 86, Lord Buckmaster while considering the question as to how the external boundaries of a permanently settled estate should be decided m....
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....ssession of his permanently settled estate provided he pays regularly the amount which he agreed to pay by the engagement endorsed by the kabuliyat executed in pursuance of the regulation. It should be stated here that after the promulgation of the regulation the zamindars were called upon to enter into kabuliyats with the Government of India through the Collector and in these kabuliyats they expressly applied that the estates of which they were in possession as zamindars should be settled with them. But the actual settlements were made with the zamindars in possession only if they agreed to pay the assessment fixed after an elaborate investigation by the officers and if they did not agree to pay the amount of the proposed assessment the estate was settled with other persons who agreed to make that payment. This conclusively shows that the payment which is being made was made in pursuance of the permanent settlement of the estate which could be made and was made in many cases, not with the old proprietors but with anybody who on agreeing to pay the jama was placed in possession of the estate with a promise that if he or his lawful successors would go on paying the assessment which ....
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....n altered changing the words "assessed to land revenue in British India" to "assessed to land revenue in Bihar" and by changing the words "subject to the local rate assessed and collected by officers of the Crown as such" to "subject to the local cess or rate assessed and collected under any Bengal Act or under any Bihar and Orissa Act or under any Bihar Act." It was therefore, argued that by the analogy of Section 141, Government of India Act, the Provincial Legislature has no power to vary the meaning of the expression "agricultural income" and therefore the whole Act is ultra vires. But Section 141 does not seem to be of much assistance as it provides that "no Bill or amendment which imposes or varies any tax or duty in which Provinces are interested, or which varies the meaning of the expression 'agricultural income' as defined for the purposes of the enactments relating to Indian income tax, etc., shall be introduced or moved in either Chamber of the Federal Legislature." The Act was not passed by the Federal Legislature. But the important question to consider is whether the power of the Provincial Legislature to impose tax on agricultural income in item 41....
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.... Collector of the district who is defined to be the officer in charge of the revenue administration of a district and includes any person specially invested with the powers of a Collector for the purposes of this Act. Sections 14, 16 and 17 describe the procedure which must be adopted by the Collector requiring the holders of an estate or tenure of a certain description to lodge at his office return of all the lands comprised therein. By Section 18 the omission to furnish a return involves the liability to pay a daily fine until the valuation of the lands has been ascertained and determined by the Collector. By Section 22 the Collector is empowered, if he is not satisfied as to the correctness of the return, to fix an annual value of the lands by making independent enquiry. These provisions show that the assessment is made by a Collector who is an officer of the Crown. The rate at which the cess is to be assessed on the annual value of the land determined under Chapter 2 is fixed in the manner provided in Chapters 1 and 3. The collection of the cess is provided in Section 41 which enjoins every holder of an estate to pay to the Collector annually the entire amount of local cess ....
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.... These provisions strengthen me in the view which I take that the local cess is assessed and collected under the Cess Act by the officers of the Crown as such. It was then urged that the Collector under the Cess Act cannot be styled as an officer of the Crown as such because, so it was argued, there is no bar to any private person being specially invested with the powers of a Collector for the purposes of the Cess Act. This argument, though attractive, loses sight of the fact that the Collector or the Collector of the district as defined under the Cess Act becomes an officer of the Crown the moment he is invested with the powers of the Collector for the purpose of the Cess Act. The Collector is almosts invariably a member of the Indian Civil Service and the Provincial Civil Service. It was then argued that as the definition admittedly embraces lands which may be subject to a local cess or rate like that under the Bihar Municipal Act which is neither assessed nor collected by an officer of the Crown as such, the whole definition becomes ultra vires as it is not permissible to dissect it so as to make it applicable to those lands which are subject to local cess and rate assessed a....
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....more than any persons who may be within the jurisdiction of the colony by any means whatsoever and that therefore if that construction were given to the statute, it would follow as a necessary result that the statute was ultra vires of the Colonial Legislature to pass. Their Lordships are far from suggesting that the Legislature of the colony did mean to give to themselves so wide a jurisdiction. The more reasonable theory to adopt is that the language was used, subject to the well known and well considered limitation, that they were only legislating for those who were actually within their jurisdiction, and within the limits of the colony". It. has not been shown to us that the Bihar Legislature had meant to exercise so wide a jurisdiction that they intended to impose a tax on agricultural income from those lands which could not be reached by India Act definition. The more reasonable theory to adopt is that the language was used bona fide believing that they were legislating only for those lands which were actually within their jurisdiction. But reliance was placed upon the observation of the late Sir Shah Mohammad Sulaiman in the Federal Court judgment in Subrahmanyan Chettiar....
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....usefully draw attention to the judgment of their Lordships of the Privy Council in Attorney General for Canada v. Attorney General for British Columbia [1930] A.C. 111 where Lord Tomlin who delivered the judgment of the Board laid down four propositions which he deduced from the decisions of the Judicial Committee in deciding questions of conflict between the jurisdiction. Applying those propositions I reach the same conclusion. Lastly it may be pointed out that it will be quite permissible to adopt the definition of agricultural income as given in the Income tax Act (which is the definition under the India Act) in order to find out whether the land, the agricultural income whereof is sought to be taxed, satisfied the requirements of that definition. In other words, the definition given in the Act may be either ignored or construed so as to make it apply to the subjects within the ambit of the definition given in the Income tax Act. Perhaps this question is not of importance in this case because it is not shown that the land of the plaintiff from which agricultural income is derived, which is proposed to be taxed, is not subject to land revenue, nor has it been shown to be the s....
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....he Act, I must accept the argument advanced on behalf of the defendant that the regulation is not an Act of Parliament extending to the whole of British India. Is the regulation an Act of Parliament? an elaborate argument was advanced before us to ascertain the position of the East India Company at the time when the Regulation was promulgated. It was argued that at that time the only legislative power was in the Parliament and had not been conferred either upon the East India Company or upon the Governor General in Council and therefore the regulation was an Act of Parliament. It is true that the position of the East India Company was somewhat anomalous and it is impossible to discover the precise date when the Company exchanged the character of subject for that of sovereign and obtained for the Crown the rights of sovereignty. But for the purposes of this case it is sufficient to make reference to the following observations made by Sir Arthur Wilson while delivering the judgment of the Board in Hemchand Devchand v. Azam Sakarlal Chhotamal [1906] 33 I.A. 1. The passage is at page 15: "the time under consideration divides itself naturally into two periods, that of the Gover....
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....to the Company and since 1858 exercised directly on behalf of the Crown, the British Empire in India has been built up." If the Regulation was promulgated by the East India Company or by its officers, namely, the Governor General of Bengal the regulation was promulgated by a body to whom sovereign power has been delegated. It was pointed out by Lord Selbourne in the celebrated case in Empress v. Burah [1877] 5 I.A. 178, at p. 193; I.L.R. 4 Cal. 172 at p. 181 that the "Indian Legislature has powers expressly limited by the Act of the Imperial Parliament which created it; and it can, of course, do nothing beyond the limits which circumscribe these powers. But, when acting within these limits, it is not in any sense an agent or delegate of the Imperial Parliament, but has, and was intended to have, plenary powers of legislation, as large, and of the same nature, as those of Parliament itself." But if on the other hand the East India Company or the Governor General of Bengal had not power to make this legislation then how can it be held that it was an Act of Parliament? Mr. P.R. Das, who argued the case as an amicus curiae on behalf of the plaintiff, with his usual ab....